I have sold a residential land on 31/10/2017 and I have parked the capital gains from the sale in a CGAS account. By what date should I buy a ready-to-move apartment? The apartment I want to buy is still under construction and it may not be "Ready-to-move" before the end of 2 years (i.e. 31/10/2019). In that case, can I buy the apartment after that date with a "Ready-to-move" status? Or should I buy it in its current status i.e. "Under Construction" I want to make the purchase once it is "Ready-to-move" because that will save me the GST. What should I do in this current scenario?
Hi
If you buy a ready to move in property, you need to invest before 31/10/19.
However, if you buy an under construction property, the construction should get completed before 31/10/20.
So, if your desired property's construction is not getting completed before 31/10/19, you have to buy it in the under construction phase and the construction should be completed by 31/10/20.
Timeline is 31.10.2019
You would have invested in the capital gain account scheme where you would have mentioned that you will purchase property within 2 years and now if you decide to convert it into under construction purchase then you need to shift your money.
Was it just a land or house? Are you claiming deduction u/s 54 or 54F?
Secondly if you get a possession certificate from the builder till october 2019 then also it will be considered as you have purchased the property as there are various case laws which suggest that if you have got the possession of a property but there are some small work left it will qualify as valid purchase.
You can ask your builder whether he is going to opt for new gst rate or old one if he opts for new scheme then you might save some amount. If the flat is still not ready to move then you will have to either let go GST or capital gain tax.
Have you not booked the flat yet?
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Thank you.
Hi,
Hope you are doing well !!
-If you want to purchase the ready to move property, you need to invest the amount on or before 31/10/2019.
-If you want to purchase the under construction property, the construction must be completed within 3 years of date of transfer i.e. 31/10/2010.
@Naman Maloo It was just land and I am claiming deduction u/s 54. During opening my CGAS A/c, I mentioned the period to be 3 years. Now if I want to buy the property while it is still under construction, do I need to change the section under which I am claiming deduction? Can it be changed? I have not booked the property yet. Now, if I want to buy an under-construction property, then can I book post 31/10/2019 and complete all payment and get possession before 31/10/2020. Will that be okay?
Yes, you need to change the section from 54 to 54F.
Yes, it can be changed.
Yes, it will be okay.
The exemption should have been claimed under section 54F.
Yes, that would be okay.
If its just a land then i afraid to say that you are not eligible to claim deduction under 54, you should have claimed deduction under 54F. now you can only update your return under section 154 and it will raise some issues so i won't suggest it.
If you have mentioned the period to be 3 years then there is no need to change.
Yes that will be okay.
it would be great if you can call and discuss this thing in detail.
Hi,
- As you have not yet booked the property and you will make the entire payment after the construction of the property then it would be treated as purchase of the property and not construction. For purchase, period is two years.
Thanks